i don't know why people find this puzzling. He is milking a cap circumvention promise they made years ago. They won't give him 2.6M as a coach because that would be a very clear sign that some shady **** went on. He has them over a barrel because if they don't give him the spot he can spill the beans. $900k of this is covered by the league as well since its a "minimum" deal. They will pray he retires.
I also don't know if there is a years of service calculation in the player's retirement program. I'd guess it caps out at some point.